A blog about software patents, information security, data privacy and similar legal issues.

Monday, January 30, 2017

The effectiveness of incentives in changing patenting behavior

The first article in the BJHS December 2016 special issue (Authority and ownership: the growth and wilting of medicine patenting in Georgian England (hereinafter "Authority and Ownership")) describes a sudden rise and equally precipitous fall in the patenting of medicines in England in the mid eighteenth and early nineteenth centuries. Specifically, it describes how medicine patenting expanded in response to specific economic pressures - the emergence of a truly national market, and the concomitant increase in the importance of a patent as both a means of protection and a tool for legitimization.1. It also describes how legal changes - judicial decisions tightening the disclosure requirements for a medicine patent2 and, more importantly, the introduction of an excise stamp which could perform many of the same roles as a patent but was cheaper and easier to obtain3 - led to a corresponding downfall at the end of the period of study.

Reading through the article, I was struck by the responsiveness of patenting of medicine in Georgian England to the changes in incentives caused by the various legal and economic changes the article discusses. By contrast today, despite recent anti-patent changes such as the institution of post grant review proceedings in the AIA and the tightening of subject matter eligibility standards in Alice and Mayo, the number of patent applications filed per year has held roughly steady through the patent office's 2015 fiscal year.4 One reason for this potential difference in responsiveness? At the end of the period examined in the article, those who might otherwise have gotten a patent had a viable alternative in the form of an excise stamp. By contrast, today the policy changes which could serve to make patenting less attractive have not been accompanied by any alternative form of protection that would be patent holders could avail themselves of. As a result, because inventors today (like in Georgian England) are responsive to economic incentives, I predict that the current anti-patent policies will ultimately prove ineffective at changing behavior unless they are supplemented with some kind of alternative protection which could address the needs which inventors will otherwise look to have satisfied by the patent system (regardless of how hostile it becomes).

1. Authority and Ownership at 553-54

The rise of medicine patenting was secondary to changes in the market for 'patent medicines' and their ownership in teh middle third of the eighteenth century. Helped by advertising in the expanding provincial press and improved communications, true national markets were created for several medicines, and the owners and wholesalers became more expert and specialized in supplying medicines across the country.
...
So the participants in the industry had become more commercially aware, and they were probably seeking greater protection for their property. Also, selling medicines across the country needed better publicity and improved branding: both were enhanced by the authority of a royal patent.

2. Authority and Ownership at 555

Lord Mansfield’s judgement in Liardet v. Johnson (1778) determined that the patentee should ensure that the specification was sufficient for a skilled tradesman to make the product without further experimentation after the patent had expired. This seemed to place the patentee under a positive obligation to provide useful information on the composition of the medicine. Once again, the specification was threatening the secrecy of a patented medicine, though several more legal judgments were required before the specification of patents became fully informative. By the end of the eighteenth century, an owner would be more concerned about the risks to the secrecy of his recipe posed by the specification than he would have been thirty years earlier.

3. Authority and Ownership at 556

the major cause of the decline in medical patenting in the late eighteenth century was probably the introduction of the compulsory medicine excise stamp, another official device which could itself provide many of the benefits of the patent, but with much less expense and inconvenience.

4. According to the patenting activities table in the patent office's 2015 performance and accountability report, there was a slight drop off in the number of patent filings from 2014-2015, and that the number of filings had increased in each of the preceding three years.

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